Oil Giant “Desperate” to Derail $27 Billion Liability

QUITO, Ecuador (February 09, 2010)--In its latest attempt to evade a $27 billion liability in Ecuador, Chevron is misrepresenting key facts about a court-appointed expert who conducted a damages assessment not to the company’s liking, representatives of the plaintiffs announced.

“Chevron is again trying to strong-arm the court by misrepresenting facts,” said Steven R. Donziger, an American legal advisor to the plaintiffs. “This is part of an underhanded attempt to derail a trial Chevron is losing based on the voluminous scientific evidence.”

On Tuesday, Chevron in a press release announced it had “newly discovered” evidence that the court-appointed Special Master who conducted a damages assessment, Richard Cabrera, owns a remediation company in Ecuador that stands to benefit from a clean-up should the plaintiffs win the case. The filing is the 29th official motion Chevron has made to the court to disqualify Cabrera but the court has never accepted Chevron’s arguments, said Donziger.

Chevron is accused in the underlying lawsuit of deliberately dumping more than 18 billion gallons of waste into Ecuador’s Amazon when it operated oil fields in that country from 1964 to 1990, causing a spike in cancer rates and decimating indigenous groups. The communities claim the pollution left is still leaching into soils and groundwater and has poisoned an area the size of Rhode Island.

Cabrera, working with a team of 14 scientists, found damages could be as high as $27.3 billion. A court will make a final determination on liability and damages later this year.

According to Pablo Fajardo, the lead Ecuadorian lawyer in the case, in its latest court filing Chevron fails to note that:

• Cabrera disclosed to the court that he owned a clean-up company before his appointment as Special Master. This fact was properly cited by the court as one of the reasons he was qualified to do the damages assessment.
• Chevron thought so highly of Cabrera’s qualifications that it accepted him as a court-appointed expert in an earlier part of the case and paid his fees as required by court rules.
• The fact Cabrera’s company is qualified to bid on clean-up contracts offered by Ecuador’s state-owned oil company is irrelevant. That company, Petroecuador, is not a party to the case against Chevron and would have no role in any eventual cleanup.
• Cabrera by virtue of his role in the case would be barred from having a role in a future clean-up.
• Chevron misrepresents Cabrera’s role. Contrary to Chevron’s assertions, Cabrera did not rule on the critical question of liability and did not “exculpate” Petroecuador. Liability can only be determined by the court.

The case was transferred in 2002 to Ecuador from U.S. federal court (where it was originally filed in 1993) at Chevron’s request. Once the trial began in Ecuador in 2003 and the evidence pointed to Chevron’s culpability, the company began to try to delay the proceedings and discredit the court and Cabrera.

In the 1990s, in its effort to move the case to Ecuador, Chevron filed 14 sworn affidavits in U.S. federal court praising the fairness and competency of Ecuador’s courts. Once it was clear the company could lose the trial in Ecuador, Chevron filed multiple legal actions in the U.S. to shift the potential liability to Ecuador’s government, said Donziger.

Not one of the U.S.-based legal actions -- including one that was denied by the U.S. Supreme Court -- have succeeded. Chevron’s latest move is to seek a closed-door international arbitration under a trade pact between the U.S. and Ecuador, but the Amazon communities and Ecuador’s government have filed separate motions in U.S. federal court to block that proceeding, said Donziger.

“Chevron loses credibility in front of the court and the world each time it files a frivolous motion based on unsubstantiated facts,” said Donziger. “Each of these motions is part of an evidentiary record that we will use to prove that Chevron completely abused the court process in Ecuador to evade a judgment, in violation of the law.”

“We believe all of these Chevron attacks will backfire against the company in a later enforcement action to collect on any judgment,” said Donziger. “Judges are not as naïve as Chevron seems to think they are.”